A consumer durables company (hypothetical) is launching an IPO.
Write an IPO note recommending subscribe or avoid. Put the call and the reason first, then the valuation, what the use of proceeds tells you, and the risks.
100 points, 60% to pass.
₹6,000 crore on ₹150 crore of profit is 40x trailing earnings — at the midpoint of peers, so not a discount for a newly listed company. The margin expansion helps but needs to be tested: is it scale, or a one-off in input costs? A 60% offer for sale means most of the money goes to the exiting investor rather than the business; the 40% fresh capital funds a factory that adds execution risk before it adds earnings. A strong note makes a call — typically 'subscribe for listing only if…' or 'avoid' — and prices it rather than listing pros and cons.